The CBIZ Small Business Employment Index (“SBEI”) reported a 1.06% seasonally adjusted decrease for November, veering from historical year-end data that is largely supported by the holiday shopping season. Waning consumer confidence, increasing COVID-19 cases, travel restrictions and political rhetoric have weighed on small businesses and been reflected in their hiring practices. The CBIZ SBEI tracks payroll and hiring trends for over 3,500 companies that have 300 or fewer employees, providing broad insight into small business trends.
“The CBIZ SBEI reveals a startling decline in November, further illuminating the unique headwinds the small business landscape has faced this year,” said Philip Noftsinger, Executive Vice President, CBIZ, Inc. “While small business hiring increased in September and October, the tables turned in November with escalating uncertainty.”
The sentiment from the ADP and Moody’s employment report was more upbeat, with private-sector jobs climbing by 307,000 on a month-over-month, seasonally adjusted basis, and small businesses reporting 110,000 new jobs. The ADP and Moody’s report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
From a geographic standpoint, the West (1.36%) was the only U.S. region to see hiring increase, as the Northeast (-1.79%), Central (-1.43%) and Southeast (-0.67%) scaled back hiring. Hiring also decreased for states that opened on or before May 15 (-1.73%) and states that opened afterward (-0.97%).
A number of industries saw hiring decline, notably Technology and Life Sciences, Construction, Accommodation and Food Services, and Real Estate. On a more positive note, hiring increased in Arts and Entertainment, which had experienced depressed trends since the spring. Hiring grew among Non-Profits as well.
“We’re hopeful that consumer activity throughout the holiday shopping season will move the needle for small business hiring in December,” Noftsinger added. “Early returns on the season indicate favorable trends, but threats from COVID-19 and potential economic shutdowns remain in play.”
To view an infographic with data from the employment index, visit the CBIZ website.
Additional takeaways from the November SBEI include:
November’s snapshot: 19% of companies in the index increased staffing, 55% reported consistent employment levels and 26% decreased staffing.
Industries at a glance: Technology and Life Sciences, Construction, Accommodation and Food Services, and Real Estate saw hiring decline. Meanwhile, hiring improved for Arts and Entertainment in addition to Non-Profits.
Geographical hiring: Hiring decreased in three of the four major regions, including the Northeast, Central and Southeast. The West, on the other hand, expanded hiring.
What’s next? With the holiday shopping season afoot, consumer activity will likely play a deciding role in small business hiring in December, coupled with effects from the COVID-19 pandemic.
(1) The SBEI illustration is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License. Based on our work at https://www.cbiz.com.
About CBIZ, Inc.
CBIZ, Inc. provides professional business services that help clients better manage their finances and employees. CBIZ provides its clients with financial services including accounting, tax, financial advisory, government health care consulting, risk advisory, real estate consulting and valuation services. Employee services include employee benefits consulting, property and casualty insurance, retirement plan consulting, payroll, life insurance, HR consulting and executive recruitment. As one of the largest accounting, insurance brokerage and valuation companies in the United States, the company’s services are provided through more than 100 company offices in 33 states. CBIZ Employee Services Organization is a division of CBIZ Benefits & Insurance Services, Inc.